The above documents can also be accessed on the Company's website at: www.mbplc.com

The Company's Annual General Meeting will be held at Mitchells & Butlers plc, Retail Support Centre, 27 Fleet Street, Birmingham, B3 1JP on Tuesday 24 January 2017 at 2.00pm.

A condensed set of Mitchells & Butlers plc financial statements, information on important events that have occurred during the year and their impact on the financial statements and responsibility statements were included in the Company's Full Year Results announcement on 22 November 2016. That information, together with the information on Risks and Uncertainties given below, constitutes the requirements of DGTR 6.3.5 which is to be communicated via an RIS in unedited full text. This announcement is not a substitute for reading the full Annual Report and financial statements. To view the Full Year Results announcement, visit the Company website: www.mbplc.com/investors/

Risks and uncertainties

This section highlights the principal risks and uncertainties that affect the Company, together with the key mitigating activities in place to manage those risks. This does not represent a comprehensive list of all of the risks that the Company faces, but focuses on those that are currently considered to be most relevant at the current time.

The processes that are used to identify and manage risks are described in the internal control and risk management statement on pages 52 and 53 of the 2016 Annual Report.

Risk category and description

Controls/mitigating activities

Market risks

Declining sales performance

This risk falls into three main categories:

Sales: There is a risk that declining sales may adversely affect our market share and profitability, reducing headroom against securitisation tests.

Consumer and market insight:
If M&B fails to manage and develop its existing (and new) brands in line with consumer needs and market trends due to failure to obtain or use sufficient insight in a timely manner, this may lead to a decline in revenues and profits.

Pricing and market changes:
If price changes are not intelligently applied due to a lack of appreciation of market sensitivities and elasticities, this may result in decreased revenue and profit.

Right team and structure in place. Brand alignment ensures the right research gets done and is acted on.

Daily, weekly and periodic sales reporting, monitoring and scrutiny activity is in place.

Our Eat Drink Share panel provides robust, quick and cost effective research. This is our own panel of 27,000 M&B guests whom we can use for research purposes for quick and cost-effective insights.

Primary research in partnership with brand/category teams.

Working with suppliers to tap into their research.

Each brand has its own pricing strategy.

Price promotions are in line with the agreed strategy.

Sales training for Management.

Consumer/insight led innovation process and development for new brands.

Reduce customer complaints by improving the local management of social media responses (ie TripAdvisor).

Increased digital marketing activity.

Online guest satisfaction survey to collect guest feedback. This feedback together with the results of research studies is monitored and evaluated by a dedicated guest insight team to ensure that the relevance to guests of the Company's brands is maintained.

Cost of goods price increases

This risk falls into three main categories:

Food: The price of goods increases due to increases in demand and uncertainty of supply, leading to decreased profits.

Drinks: The price of drinks goods increases due to changes in demand, legislation, exchange rates and production costs, leading to decreased profits.

Goods not for resale: Increases in the price of goods not for resale and utilities costs as a result of increases in global demand and uncertainty of supply in producing nations can have a significant impact on the cost base, consequently impacting margins.

Overall, price increases are mitigated as Mitchells & Butlers leverages its scale to drive competitive cost advantage and collaborates with suppliers to increase efficiencies in the supply chain. The fragmented nature of the food supply industry on the world commodity markets gives the Company the opportunity to source products from a number of alternative suppliers in order to drive down cost. Key mitigating activities for food and drink are detailed below:

Food:

A Food Procurement Strategy is in place.

Full reviews have been carried out on key categories to ensure optimum value is achieved in each category.

A full range review was completed in early 2015 ensuring the correct number of products/suppliers.

Regular reporting of current and projected inflation.

Good relationships with key suppliers.

Drinks:

Each drinks category has a clearly defined strategic sourcing plan to ensure company scale is leveraged, supply base is rationalised and consumer needs are met.

Good relationships with key suppliers.

Supplier collaboration programmes are in place.

Plans in development to mitigate Sugar Tax.

Risk is increasing mainly due to the devaluation of sterling following Brexit, changes in Government (raising risk of punitive duty changes) and the introduction of the Sugar Tax in 2018.

Operational risks

People planning and development

Mitchells & Butlers has a strong guest focus, and as such it is important that it is able to attract, retain, develop and motivate the best people with the right capabilities throughout the organisation. There is a risk that without the right people our customer service levels would be affected.

The Company makes significant investment in training to ensure that its people have the right skills to perform their jobs successfully. Furthermore, an employee survey is conducted annually to establish employee satisfaction and engagement and this is compared with other companies, as well as previous surveys. Where appropriate, changes in working practices are made in response to the findings of these surveys.

Remuneration packages are benchmarked to ensure that they remain competitive and a talent review process is used to provide structured succession planning.

Business continuity and crisis

management

Mitchells & Butlers relies on its food and drink supply chain and the key IT systems underlying the business to serve its guests efficiently and effectively. Supply chain interruption, IT system failure or crises such as terrorist activity or the threat of disease pandemic might restrict sales or reduce operational effectiveness.

The Company has in place crisis and continuity plans that are tested and refreshed regularly.

The Company's third-party back-up facility, for retail support centre employees, has been successfully tested to ensure critical business systems are able to function in the event of a disaster. In addition, during FY 2016, departmental Business Continuity Plans have been revised, updated and reviewed by the Risk Committee.

Information security and

disaster recovery

There is a risk that inadequate disaster recovery plans and information security processes are in place to mitigate against a system outage, or failure to ensure appropriate back-up facilities (covering key business systems and the recovery of critical data) and loss of sensitive data.

In FY 2016 a detailed review of information security, disaster recovery and IT resilience was performed in order to highlight any gaps and address any challenges that had been presented in exploring the viability of a disaster recovery test for our business critical applications. During the year a number of improvements have been made, including:

Ongoing security awareness initiatives have been and continue to be undertaken.

Wage cost inflation

There is a risk that increased costs associated with the introduction of the National Living Wage may adversely impact upon overall operational costs.

A detailed review of the risks associated with successfully implementing the National Living Wage has been completed. This review has been undertaken at a strategic level and seeks to ensure that appropriate mitigating actions are in place, some of which are in relation to how the Group carefully manages productivity and efficiency across the estate. Implementation of the National Living Wage will continue to remain an area of focus in FY 2017.

We are currently trialling a new Time and Attendance system to improve the management controls and reporting of staff hours.

Borrowing covenants

There are risks that borrowing covenants are breached because of circumstances such as:

i. A change in the economic climate leading to reduced cash inflows; or

ii. A material change in the valuation of the property portfolio.

The Company maintains headroom against these risks. The finance team conducts daily cash forecasting with periodic reviews at the Treasury Committee, the roles of which include ensuring that the Board Treasury Policy is adhered to, monitoring its operation and agreeing appropriate strategies for recommendation to the Board. In addition, regular forecasting and testing of covenant compliance is performed and frequent communication is maintained with the Securitisation Trustee.

Pension fund deficit

The material value of the pension fund deficit remains a risk.

The Company has made significant additional contributions to reduce the funding deficit. In May 2014, the Company reached agreement on the triennial valuation of the Group pension schemes as at 31 March 2013, at an increased funding shortfall of £572m (March 2010 valuation £400m). The value of total deficit at the end of FY 2016, following the revised contributions, is £337m (FY 2015 £350m).

Failure to operate safely and legally

A major health and safety failure could lead to illness, injury or loss of life or significant damage to the Company's or a brand's reputation.

Mitchells & Butlers maintains a robust programme of health and safety checks both within its restaurants and pubs and throughout the supply chain. The dedicated Safety Assurance team uses a number of technical partners including food technologists, microbiologists and allergen specialists to ensure that our food procedures are safe. Regular independent audits of trading sites are performed to ensure that procedures are followed and that appropriate standards are maintained. Food suppliers are required to meet the British Retail Consortium Global Standard for Food Safety and are subject to regular safety and quality audits. Comprehensive health and safety training programmes are in place.

Food supply chain safety

Malicious or accidental contamination in the supply chain could lead to food goods for resale being unfit for human consumption or being dangerous to consume. This could lead to restrictions in supply which in turn causes an increase in cost of goods and reduced sales due to consumer fears and physical harm to customers/employees.

M&B has a Safety Assurance team and uses a number of technical partners including food technologists, food safety experts, a microbiologist, allergy consultants, trading standards specialists, nutritionists, etc.

M&B uses a robust system of detailed product specifications.

All food products are risk rated using standard industry definitions and assessment of the way the products are used in M&B kitchens. Suppliers are then risk rated according to their products.

Each food supplier is audited at least once per annum in respect of safety and additionally in response to a serious food safety complaint or incident.